Will Customers Say ‘YES’ to Double-Charging for Streaming

YES Network officially launched its partnership with Cablevision to stream Yankee games in New York Wednesday, the first local market live streaming deal in the major professional sports that rely on local TV revenue. A day later, the network had the perfect bargaining chip – a mid-week afternoon game. Now fans can catch every minute of the Bronx Bombers, even at work.

A few aspects of the deal boggle my mind. Start with the combination of exclusivity and price point. Only customers of Cablevision’s cable and Internet product are eligible to sign up, thus some form of authentication is in place to manage access. I’m all for charging for online content, however if Cablevision and YES implement an authentication system, doesn’t that assure that all the users already pay for YES Network on cable? The point of charging for online content is to avoid giving it out free, not to double-charge customers that follow the rules.

Given the operational cost of live streaming and the anticipated demand networks and teams project, a small fee is justified, but nailing customers for $50 for the season while still charging them for YES on their cable bill will not help gain traction for the service.

On to the second key point, content distribution. Streaming video will most benefit users who can’t access the network on TV, so why cut exclusive deals for people who already receive the network. YES should focus on those who currently have no access to YES, thus presumably have higher demand for the live stream. This may be less pertinent in the NY market, since YES is widely distributed, but look at San Diego, the next market to roll out the service. Cox has withheld Padre broadcasts from AT&T IPTV subscribers, so a significant audience that demands baseball has no access – the perfect place for live streaming. Yet, the team is dealing exclusively with Cox, who already broadcasts the games.

I understand the politics surrounding these decisions, yet it still perverse action by the teams and leagues as they attempt to usher in a new revenue stream. Given the choice of HD on a nice TV or streaming video on a little computer screen, which by the way inhibits multi-tasking, the choice is clear. However, given the choice of nothing or live streaming, sports fans will shell out.

The current price point appears to high to gain traction among cable subscribers that already have access at home. Is it really worth $50 to sneak a peek at the handful of weekday games the next 3 months? And listening to the YES marketing pitch, someone should advice them that most people don’t go to the beach and plan to watch Yankee games on the Internet. Maybe they should rethink that campaign.

If they have an authentication mechanism in place, baseball should consider different price points for current cable subscribers and non-subscribers, plus add the option to purchase individual games, in addition to the rest of the season or 30 days to encourage incremental purchases. Right now, I envision single game options would increase revenue more than lost revenue from potential 30-day purchasers trading down.

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One Response

  1. The primary reason I even subscribe to cable is for the sports networks, especially YES. If I could could get Yankee games on my computer without paying for cable (or leaving the NYC area), I would do it.

    I understand why they’re charging it this way. The bulk of local revenue for MLB teams comes from TV. And, the truth is that the majority of that money comes from people that are NOT fans of the team, or sports in general. If every Yankee fan paid $50 or $100 a season for Yankees on YES, it would not match the revenue they make from cable subscribers, especially non-sports fans.

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